U.S. home values are up 5.5 percent over the past year according to the September Zillow’s Real Estate Market Reports. This is the fastest pace of appreciation in more than two years. The median value of a U.S. home is now $189,400.
Portland, Dallas and Seattle reported the highest year-over-year home value appreciation among the 35 largest metros across the country. In Portland, home values rose almost 15 percent to a median value of $342,100. Home values in Dallas and Seattle appreciated 12 and 11 percent, respectively. For the first time, the median home value in the Seattle surpassed $400,000 and is now at $401,100.
Inventory has been falling steadily, with about 4 to 6 percent fewer homes for sale over the past several months. However, the bigger driver of home prices is increased demand. Sales have increased substantially since 2011, despite fewer homes on the market.
Bidding wars are commonplace in many housing markets across the country, as multiple buyers compete for the same home. According to Zillow’s Consumer Housing Trends Report, only 46 percent of buyers get the first home on which they make an offer, and the home search takes an average of 4.2 months.
“Increasingly strong demand has been contributing to dwindling inventory stocks across the nation,” said Zillow Chief Economist Dr. Svenja Gudell. “Healthy demand for for-sale homes amidst low inventory has been driving the market, which is another sign that the housing market is recovering nicely. Buyers in the nation’s fastest moving markets can expect the search process to last a few months, as market conditions are often extremely competitive with homes selling for above asking price and receiving multiple offers. It’s definitely a seller’s market right now, with some homes being more expensive than ever.”
Rents are rising across the nation, but have slowed considerably over the past year. In September 2015, median rents were up 5.3 percent year-over-year but have since slowed to 1.5 percent annual appreciation. The median rent in the U.S. is now $1,403.
Seattle, Portland and Sacramento reported the highest year-over-year rent appreciation among the 35 largest U.S. housing markets. Rents in Seattle are up just over 9 percent and in Portland, rents are up 7 percent. For the fourth month in a row, Seattle has the fastest year-over-year rent appreciation among the 35 largest U.S. housing markets.
Nationally, there are 6 percent fewer homes for sale than a year ago, with Indianapolis and Boston reporting the greatest drop in inventory. In Indianapolis there are 26 percent fewer homes to choose from than a year ago, and 25 percent fewer in Boston.